Articles by Ryan Avent

The aging of the Boomers means it’s time for new priorities

Ronald Reagan This past week saw the return of the annual spectacle known as CPAC — the Conservative Political Action Conference — to Washington. As is inevitable whenever conservatives gather, […]

Transit budget cuts are disasters in the making

Here is the lowdown: Transit fares generally don't cover operating expenses. Transit systems do not, unfortunately, turn a profit. In many conservative circles, this is considered a damning indictment of the whole idea of public transit -- which is itself a damning indictment of the analytical powers of the guilty conservatives.

We should expect those who benefit from a technology to pay for it. This is the basic idea behind a market economy -- people aren't in the habit of giving away something for nothing, and the best way to allocate scarce resources is to let buyers and sellers agree upon a price, which is then paid by the buyer who, we expect, will benefit from the purchase.

But sometimes, when a buyer decides to spend money on a good or service, other people benefit as well. If I build an exceptionally attractive house in a neighborhood, I benefit, but so too do my neighbors, who get to look at the house and whose own homes may appreciate thanks to their location in what is now a more attractive neighborhood. When I pay college tuition and get a degree, I benefit, but so too do future colleagues, who will enjoy greater success as part of a highly educated labor pool. If government does nothing in such situations, then we will get the level of attractive homes or college educations that suits the direct beneficiaries of such investments -- but that doesn't mean that we have provided the number that maximizes the benefit to society as a whole.

Let's not pretend the government isn't encouraging suburbs

There are a great many ways in which the government shapes our land-use patterns. Sprawl apologists often argue that low-density, suburban-style development has dominated the American landscape over the past half century because it is clearly superior to alternatives. Now, there's no doubt that many Americans prefer suburban life.

At the same time, it's impossible to ignore the overwhelming way in which government policy has encouraged such development, intentionally, and unintentionally. The government didn't necessarily intend for a massive network of (largely) free-to-user highways to spur suburban growth and gut urban centers, but that's what happened. Similarly, the government's long-term commitment to increased rates of home-ownership wasn't necessarily about changing land-use patterns. But as economist Ed Glaeser notes at the New Republic, the relationship between the policy and the outcome is clear:

Roughly 87 percent of all single-family detached homes are owner-occupied. Roughly 87 percent of all homes in buildings with five or more units are rented. Multi-family dwellings have common spaces, such as lobbies, and common infrastructure; sharing joint control over these things can often be quite difficult. Landlord control over large buildings irons out the difficulties of dealing with the cacophony of collective control.

The connection between homeownership and structure type implies that when the federal government gets into the business of supporting homeownership, it also gets into the business of supporting single-family detached homes -- and this means supporting lower-density living. New Yorkers have converted plenty of rental units into co-ops, but still 77 percent of the households in Manhattan rent. The government's big post-war push into homeownership was inevitably also a push to suburbanize. You do not need to be an enemy of the suburbs to wonder why the government is implicitly urging Americans to drive longer distances and flee denser living.

Of course, this is just one of many reasons why we should be skeptical of policies that subsidize homeownership. Such subsidies are regressive. They encourage heavy, leveraged investments in undiversified assets that perform unexceptionally over time. They reduce mobility, which prevents households from responding to changing economic conditions. And should there be a massive housing bubble and collapse, they put millions of households at risk of foreclosure and bankruptcy and contribute to global economic meltdown.

But for all this, the odds of a reversal of these policies, like the mortgage interest reduction, are basically zero. Which is yet another reason that we ought to focus on undoing other suburban subsidies wherever it's politically feasible. Congestion pricing, which could address crowded freeways while funding better urban transport, is a good place to start.

Transportation policy and the working married woman

Progressives in favor of congestion pricing on highways and in central cities tend to argue for those policies on progressive grounds (shock!) -- that such pricing systems reduce emissions, improve air quality, and fund transit improvements, which benefit lower- and middle-income households. Those are all nice benefits to congestion pricing programs, but we shouldn't neglect the congestion reduction function.

Congestion costs America some $80 billion per year, in the form of lost time and wasted fuel. And as it turns out, commutes extended by congestion have other effects, as well:

There is a strong empirical evidence demonstrating that labor force participation rates of married women are negatively correlated with commuting time. What is more, the analysis shows that metropolitan areas which experienced relatively large increases in average commuting time between 1980 and 2000 also had slower growth of labor force participation of married women.

Long commutes are typically associated with dense cities like New York, but in recent decades, congestion has grown fastest in places with rapid exurban growth -- like Dallas, Riverside (California), San Diego, and Washington, D.C.